Wednesday, April 25, 2007

April 25 Trade Summary $239

I traded the first 2 hours, and now I'm done(I'm most productive during this time period and the market is looking a little choppy now).

P/L= $239

Good things today-
1. I'm trading more frequently like yesterday and gaining execution experience.

Bad things today-
1. I'm still making errors when exiting my trades using IB Book Trader.
2. I should have used a buy stop on my first YM short trade of the day, instead of going for a 5pt scalp.
3. I need to work on my entries when adding to a core position.(If your going to add to a long position, don't add by using buy stops placed a few ticks above the current price, instead buy when you feel its right, like right now, while the price is on a down tick)

Market Observations-
I'm going to make a new strategy that has a 80-90% chance of success during bull markets. It's called, "If new lows are being made between 7:15-7:30am with a decline in volume seen in ES,,,,,BUY!!!" Today we got the TIME REVERSAL of 7:15am on the dot on SPY,,,,YAWN... I should have held my long position,,,,,LONGER....
Also something I've noticed in bonds these last few months is ZN getting faded after a spike off of news after 7:30am, which follows in relation to JPY and EURO.

ER2 and IWM charts-


I'm thinking about imploying a new strategy on the currencies. I want to test on the simulator "how good of an entry" I can get using buy/sell stops on the release of economic numbers. When economic numbers come out that effect the currencies you will often see a spike in the currencies in one direction that lasts a good 20 minutes sometimes, where as ES may pop up then down, and then back up again before deciding a direction, which would end up chopping your position to pieces if you used this strategy on ES. I'm also thinking of doing a pair strategy on the currencies, where you enter a pair of currencies, 1 short and 1 long, with the more volatile of the 2 being the position you have a biased position on. This strategy would hedge your trade, and depending on how good of an exit you can get on your losing half of the pair, may be a strategy that has an edge worth trying. This might work on the bonds too, trading ZN/ZF/ZB. I remember Dr. Steenbarger had a post about a trading coach that did something like this, here is the article- Traderfeed: Dealing With Price Spikes: A Best Practice in Trading If anyone has any experience trading economic numbers on currencies or bonds, please leave a comment on your experiences.


Anonymous said...

I'm long on one of your legs being very sore from all the kicking its been getting from your other leg for having a day job and missing allll that afternoon action. ;) (unfortunatly I missed it too)
Btw as far as economic numbers go, when the oil info came out today I looked to go long QM the obvious trade but for some reason it ran down .2 before rallying for a full point. After it dropped .2 I stopped tracking it till later in the day when I noticed it had ran for a full point plus. I figure the play here on ES or other volatile indices is to wait out the noise after news and take the confirmed trend.

HPT on 6:39 AM said...

Oil always jumps around on the 7:30 number. It's important to watch volume. I've noticed in the past that XLE puts in some good trend days an hour later on oil number days. If new highs/lows are being made an hour later, there's a good chance that direction will continue for an hour I've noticed.

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